By coinnews 
00:00 Brad Smith
Investors digesting fresh economic data out this morning, the Fed’s preferred inflation gauge, PCE, coming in lower than expected on an annual basis. Here with more, we’ve got Fed correspondent for Yahoo Finance, Jennifer Schonberger. Jennifer, what do we know here?
00:18 Jennifer Schonberger
Yeah, Brad, honestly, these numbers look really good on their face. Inflation clearly cooling in the month of April even as tariffs kicked in full blast. And this is likely to keep the Fed on hold though, because the Fed is in a strange juxtaposition here, right? The hard data looks really good. Inflation continuing to cool this year. At the same time, they’re focused on the outlook, specifically the impact of tariffs as it relates to inflation. There is an internal debate now within the Fed whether higher inflation from tariffs, if we see it, we haven’t seen it yet, at least in this report, uh, could prove longer lasting or if it will be a one-time increase in prices. The Fed is keenly aware of the mistake they made coming out of the pandemic, when we had that supply side shock, when they looked through inflation, thinking it would be transitory, only for inflation to prove the worst we’ve seen since the early 1980s. So that is why the Fed is going to stay on hold despite this really good data. I mean, you look at this headlined at 2.1%, they’re practically at target. Core falling to 2 and 1/2%, which is their preferred gauge and it excludes those volatile food and energy prices. And if it weren’t for tariffs, the Fed probably would be cutting. In light of this inflation data, President Donald Trump likely to call on the Fed to lower rates. Again, I don’t expect them to do that. And I just want to flag Dallas Fed President Lorie Logan’s comments last night. Uh, she sent a strong veiled message about holding rates steady in the face of the president’s calls for lower rates. She said that quote, rates are in a good place now and it could take quote, quite some time to know whether the balance of risks is shifting in one direction or another. She went on to say that the effect of rate changes will take time to play out. And to get the balance right, we always have to think about where the economy is headed, not where it is just right now. She said it in the short run, a central bank could always quote juice employment by cutting interest rates. People might enjoy that for a little while, but over time, excessive rate cuts would trigger a spiral in inflation. So that kind of gives you a sense of where the Fed is now. Again, Brad, great numbers, but probably going to keep the Fed on hold.
04:00 Akiko Fujita
And Jennifer, just want to follow with you on President Trump’s meeting with Fed Chair Jay Powell this week. Talk to us about what came out of that meeting.
04:09 Jennifer Schonberger
Yeah, you know, it’s funny because three weeks ago, Maddie, I asked Fed Chair Powell, why haven’t you requested a meeting with President Trump in light of all this uncertainty? And he said, I would never request a meeting with the president. The president would have to call on me. Of course, you know, the Fed is an independent agency and that is the typical protocol. Uh, Trump was asked the following day whether he would meet with Powell or call for a meeting. He said it’s like talking to a wall. Three weeks fast forward and looks like Powell met with Trump. Trump apparently tried to push Powell to lower rates in the meeting, some of the same thing that we’ve seen play out in the public eye. Uh, Powell, according to statements from the Federal Reserve, uh, did not talk about monetary policy with the president, but said the purpose of the meeting was to talk about the outlook for the economy, inflation, and employment.
05:33 Akiko Fujita
Jennifer, always appreciate your reporting. Thank you so much.